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Private brands ready for takeoff in China

By Zheng Xin (China Daily) Updated: 2015-01-28 09:02

"Five years ago the top 5 brands were all SOEs, whereas three of this year's top 5-Tencent, Alibaba and Baidu-are market-driven, and together the three represent around half (48 percent) of the value of the top 10, led by Tencent which nearly doubled in value in the past year alone."

BrandZ is the world's largest brand equity database conducted by Millward Brown, the world's second-largest market research organization based in New York.

Millward Brown began the project five years ago with a ranking of the top 50 most valuable Chinese Brands, and expanded to 100 brands last year to more fully examine the rapid emergence of China's valuable brands across 21 categories of products and services.

The report also said that between 2011 and 2015, market-driven brands in the BrandZ Top 50 Most Valuable Chinese Brands appreciated 278 percent in value, while the brand value of SOEs grew just 6 percent.

The disparity illustrates a global trend reshaping many national economies, said the report. The difference in China is that these large cap corporations are government-owned or controlled, and within this ownership structure, SOEs have recognized the imperative of effective brand building for sustained success in China's rapidly evolving economy, it said.

According to Ray, the 2015 ranking also illustrates a rapid rise in the brand value of technology and tech-related retail brands.

Technology companies have become brand powerhouses, and as a result the technology category has now surpassed financial institutions as the highest value category, with $106.9 billion, contributing 23 percent of the top 100's total value, according to the report.

"The technology brands, Tencent, Alibaba and Baidu, which are also market-driven brands, comprise almost half the value of the top 10," he said. "In the 2014 BrandZ China Top 100, market-driven brands made up only about one fifth of the top 10 brand value."

Due to the value growth of these three market-driven brands, 70 percent of the total brand value of the BrandZ China Top 100 2015 is concentrated in the top 10, which increased 28 percent year-on-year, according to the report.

The combined value of the three technology brands, Tencent, Alibaba and Baidu, produced over one-third of the total value of the BrandZ Top 10 Most Valuable Chinese Brands 2015, it said.

Although the debut of Alibaba in the BrandZ China Top 100 influenced the sharp year-on-year rise in the technology category value, the value of technology brands has increased steadily over the past five years compared to other categories.

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